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Local Option Sales Taxes in Idaho?

1 min readBy: Scott Drenkard

After a meeting on September 20, the Idaho Chambers Alliance has decided it will make discussions of allowing Idaho localities to collect local option sales taxes a top priority for the coming legislative session. The Alliance, which is made up of over 20 local Chambers of Commerce, has had a tenuous position on the issue until recently, with only 6 participating chambers expressly voicing their support on the Alliance website for the new taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. ing authority.

A 2008 Legislative Position Statement by the Rexburg chamber stated that “there is a strong difference of opinion among the businesses we represent on the issue of local option taxes,” and they “await further details on the specifics of any proposed legislation before taking a position for or against such a bill.”

While most Idaho localities are not authorized by the state to institute local option sales taxes, some special cases allow resort cities and resort counties to do so. According to Sales TaxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. Clearinghouse, there are local sales taxes in Lava Hot Springs, Stanley, Ketchum, Sun Valley, Driggs, Donnelly, and the county of Nez Perce. The highest of these is 2.5 percent in Stanley. The statewide rate is 6 percent.

Idaho ranks 36 (1 being the highest rate and 50 being the lowest) in the recent Ranking State and Local Sales Taxes report published by the Tax Foundation.